R.I., Mass. at vanguard of offshore wind power industry, U.S. interior secretary says

PROVIDENCE — U.S. Interior Secretary Sally Jewell told attendees at an offshore wind power conference on Tuesday that Rhode Island and Massachusetts are playing key roles in the development of the nascent...

PROVIDENCE — U.S. Interior Secretary Sally Jewell told attendees at an offshore wind power conference on Tuesday that Rhode Island and Massachusetts are playing key roles in the development of the nascent industry.

“The region is off to a great start,” she said. “The load is here. The people are here. The water is here. There is great, great potential.”

No offshore wind farms have been built so far in the United States, but developers have targeted the Atlantic Ocean waters off Rhode Island and Massachusetts for installation of what could be the nation’s first offshore wind turbines.

Last month, Jewell signed an agreement to lease 257 square miles of federal waters in Rhode Island Sound to Providence-based Deepwater Wind. The waters, between Block Island and Martha’s Vineyard, could support enough turbines to generate power for up to 1 million homes, Jewell said at the conference organized by the American Wind Energy Association, an industry group.

Deepwater, which is also working on a demonstration project southeast of Block Island, won its two leases last summer in the first auction ever held by the federal government for offshore renewable energy development rights. A second auction was held for an area off Virginia in September. Competitive sales are also expected to be held next year for areas off New Jersey, Maryland and Massachusetts.

Jewell, who was appointed to her position six months ago, said that offshore wind is an important piece of the Obama administration’s drive to develop 20 gigawatts of renewable energy on public lands and waters across the United States by 2020. Referring to her years in charge of outdoor retail giant REI, she said that the American business community is increasingly supportive of renewable energy. So is the federal government, she said.

“Clean energy is critical to our future,” she said. “You have my pledge that we will work with you.”

Jewell was joined in the opening session of the two-day conference by Governor Chafee, U.S. Sen. Sheldon Whitehouse, D-R.I., and Massachusetts Secretary of Energy and Environmental Affairs Richard Sullivan.

Whitehouse, a vocal backer of renewable power, was at the signing ceremony for the Deepwater leases on Sept. 19 and recalled it as a historic moment for the offshore wind industry.

“It comes at the right time and it comes without the environmental burdens of so many of our fuel sources,” the senator said.

But he warned that the industry is undermined by the way Congress has treated a 30-percent tax credit relied upon by offshore wind developers. The investment/production tax credit has been renewed only from year to year and has lapsed at times. Whitehouse described the debate around the credit as “confusion and noise.”

“We have basically stumbled and staggered along with these programs,” he said.

Indeed, both Deepwater and Boston-based Energy Management, the developer behind the Cape Wind proposal in Nantucket Sound, are racing to qualify for the tax credit before the end of the year, when it is set to expire. They must spend 5 percent of their capital costs before Dec. 31 to make it under the wire.

For Deepwater’s Block Island project, that level of spending is equivalent to about $12 million, said company CEO Jeffrey Grybowski. Deepwater has spent about $30 million so far on the $240-million wind farm, but not all of that spending will qualify under the rules of the tax credit, Grybowski said.

Meanwhile, the Block Island project is moving along, he said. The company has submitted to the Rhode Island Coastal Resources Management Council, the lead state permitting agency for the project, a revised application with a new proposed cable route that includes a landing point at Scarborough State Beach in Narragansett. Once a public notice is released, hearings on the project can be scheduled.

Deepwater is also negotiating with two companies, one European and one American, to supply installation and service vessels for the wind farm. A decision is expected in November.

The offshore wind industry is poised for growth, said Tom Kiernan, CEO of the American Wind Energy Association.

“We’ve got some challenges ahead of us, but we have momentum like we’ve never had before,” he said. “We have the wind at our backs.”